Exploration and development company Mawson Gold has announced a nonbinding term sheet with Southern Cross Gold (SXG), outlining its intent to acquire all the ordinary shares of the Australian company that it does not own.

Following the acquisition, which will be implemented through an Australian scheme of arrangement, Mawson will rebrand as Southern Cross Gold Ltd (New Southern Cross).

New Southern Cross plans to maintain its listing on the TSX-V and pursue a dual listing on the ASX, Mawson said on Tuesday.

“There has been widespread support both in Canada and overseas for the simplification of the Mawson and SXG corporate structures. Once completed, the simpler, dual-listed structure will allow us to achieve the following core objectives: access to broader capital markets and institutional/private investors; eliminate the perceived major shareholder overhang; and attract an expected lower cost of equity capital which will allow the Sunday Creek gold/antimony asset to continue its path to development.

“I strongly believe that our proposal is in all Mawson shareholders’ interests in the short, medium, and long term,” said Bruce Griffin, a member of the Mawson special committee and an independent director.

The Sunday Creek project is located 60 km north of Melbourne within 19 365 ha of granted exploration tenements.

Over the past two months, Mawson and SXG have been exploring strategic options to maximise shareholder value. The proposed Australian arrangement reflects a mutual commitment from both companies' management teams and boards of directors to achieve their core objectives and benefit all shareholders globally.

"The single best solution, therefore, is the Australian arrangement, the principal terms of which have been agreed in-principle by SXG and Mawson in the nonbinding term sheet," added Griffin.

Meanwhile, Mawson announced that it would spin off its Swedish uranium assets, prior to the closing of the Australian arrangement. The company intends to either distribute Euro Canna Holdings’ common shares to Mawson shareholders or to sell the assets. Euro Canna hosts the majority of Sweden’s conventional hard rock historic uranium resources, with a combined 22.7-million pounds of uranium oxide.

Although Sweden benefits from having 40% of its electricity supply generated by nuclear energy, a uranium exploration and mining moratorium has been in place in the country since May 2018. The Swedish government has indicated a positive stance on re-evaluating and lifting the moratorium. Exploration, development and mining of the Euro Canna projects is still possible under the current Swedish Minerals Act; however, recovery of uranium in a mining scenario would not be permitted under the current mineral legislation.

The Swedish government announced an inquiry into the ban on mining uranium. The inquiry concluded on May 15, and a public announcement is expected to be made shortly.